January 4, 2012, Bloomberg Businessweek
By Karl Lester M. Yap
Jan. 4 (Bloomberg) — The Philippines pledged to speed up a proposed offering of infrastructure projects to investors as President Benigno Aquino seeks investments to shield the economy from a global slowdown.
The government may offer eight to 16 of the so-called public-private partnership projects worth as much as 142 billion pesos ($3.2 billion) this year, Cosette Canilao, executive director of the program, said in an interview in her Manila office yesterday. One contract was awarded last year, against an earlier estimate of as many as 10. San Miguel Corp., Ayala Corp. and Metro Pacific Tollways Corp. are among companies that have expressed interest in some of the projects, she said.
“If we are able to prove that the government is consistent with its policies in bidding out PPP projects, it will be a great boost in our efforts to attract investments,” Canilao said. “We enhanced a lot of the processes and policies regarding PPP. I’m confident 2012 will be a busy year for us.”
Aquino has unveiled $16 billion of projects as he tries to attract capital to a nation that has lured less foreign direct investment than Southeast Asian neighbors. Further delays in the program may undermine his goal to create jobs and boost growth to as much as 8 percent annually.
“The government took a bit of time to put together the structure under which the PPP will be carried out,” said Prakriti Sofat, a Singapore-based economist at Barclays Capital. “But with the systems now in place we expect a pickup through 2012. Rising infrastructure spending will over time help boost potential gross domestic product.”
The peso dropped to a 10-week low last month as Europe’s debt woes threaten to push the world into another recession, prompting funds to sell emerging-market assets. The currency gained 0.4 percent to 43.76 per dollar yesterday, according to Tullett Prebon Plc. The yield on benchmark bonds due September 2016 climbed to a three-week high, according to Tradition Financial Services.
The government last month awarded to a consortium led by Ayala Corp. a contract to build a four-kilometer, four-lane paved toll road leading to provinces south of the capital after the company submitted the higher bid of 902 million pesos.
The projects this year include a plan to develop a water source for the capital, build three airports, more than 9,000 classrooms, and a 13.4 kilometer highway connecting two expressways, Canilao said.
From 1970 to 2010, the Philippines attracted $33.98 billion of foreign investment, according to the United Nations Conference on Trade and Development. That compared with $322.13 billion for Singapore and $108.87 billion for Thailand.
The Philippines’ $200 billion economy expanded 3.2 percent in the third quarter, holding near the 3.1 percent pace in the previous three months, the slowest pace since 2009.